I’m going to be talking about sales process on my webinar this month, and I want to focus in on the most interesting part of the sales process for this article – creating a “mash-up” of assertiveness and empathy to engage a prospect about the needs they have.

But before I do that, I first have to talk about an important part of the sales process. If you want to get paid the value you deserve for the expertise you have, you have to make sure that your discussions with prospects start with a collaborative dialogue about their needs. If they’ve already defined their needs, and they’re just talking to you about a solution, then you will not get the value you deserve.

The problem is, though, that most prospects think that they’ve already defined their need.

So, how do your salespeople provoke prospects enough to change their thinking – to throw them off the path they’re already on for a solution, and get them to think more about their needs? To do that, your salespeople need to be assertive – they need to prove that they know as much about the prospect’s situation as the prospect does, and it will pay off for the prospect to listen to the salesperson. But your salespeople need to do that carefully – if they’re too assertive, then they’ll probably be dismissed. So they also need to be empathetic.

And that’s the hardest challenge your salespeople have today – how do you be assertive enough to get people to talk with you, and empathetic enough that they want to talk with you? That’s the sales process mash-up that every growth business needs to figure out.

We find the answer to this challenge in the playbook of a Trusted Advisor. Trusted Advisors have independent perspective that the person values (that’s the Advisor part) and the connection and understanding that reassures the person (that’s the Trusted part).

I’ve worked with several clients recently to create “Trusted Advisor Tools” for their people to use in sales discussions to build trust and provoke prospects to question how they’re thinking. I think every business needs these tools.

The salespeople usually see immediately how valuable these tools are and are enthusiastic to start using them. And many are actually relieved because they haven’t known how to push back against prospects in a supportive way.

We’ll develop some sample Trusted Advisor Tools on my webinar – please join us if you want to see these in action.

Stage 2 companies must already have a clear and compelling value proposition if they’re successful enough to have grown out of start-up, right?

Well, yes and no. They do have enough traction in the marketplace to show that they have a value proposition that works. But it’s actually unlikely that the company has a systematic way to communicate the value proposition. And if that is the case, it will find that revenue growth is harder and harder to achieve – and in a competitive market, the company may start to lose ground to other companies who are communicating their message better.

What should a value proposition look like? When I started out in marketing, I worked with an excellent marketing agency, who explained that the “brand positioning statement” should follow a classic formula of, “For [market segment], Our Brand is the [product category] that [customer benefits] by [points of differentiation].”

So, for a clear and compelling value proposition, you need:

– A clearly defined target market segment or customer profile – is it marketing directors who work with global brands, or owners small businesses in cities, or…

– A definition of the product category – the marketing agency I worked with explained that orange juice could be defined as a breakfast drink or as a health drink, so picking the product category has a big impact on how the product itself is perceived

– A description of the customer benefits – what are the pains you alleviate (lost revenue, production downtime, etc.) and gains you enable (new revenue sources, talent retention, etc.)

– The points of differentiation – choosing from all the ways that your product works or the ways you deliver your service, what are the ways that set it apart from the competition?

Once you have your value proposition, make sure you reinforce it with everyone in your company, and you use it to focus your marketing and sales messages.

Many of you reading this post are 10%ers. And there’s something in the back of your mind eating away at your conscience. You know there’s something not quite right about it, but you tell yourself that 10% has always served you well.

And you might be right. You’ve probably gotten along well enough with your 10%. Then again, you may feel like it no longer has the same effect that it used to. So let’s take a look at your 10% and see if it’s still serving you.

I’m inspired to write about 10% because I met with a guy last week who said, “It’s just what I’ve always done. I don’t really have a reason for it, and sometimes I wonder if it’s what I should be doing. But I’ve never known how else to do it.”

Later on, after our discussion, he said, “Yes, that’s what I want – that would help me, and it would help my team. They’ve always been a bit confused and defensive about the 10%.”

What am I talking about? Let me use his words, “We did a strategic plan back in 2008, but we’ve never updated it. It was helpful and we did some things because of it. But for the last 5 years, I’ve just said that we should grow by 10% next year. And that’s what I say at the start of each year. I kind of know that I could or should have more to my goal, but we’ve been OK just trying for that 10%.”

It’s something I’ve heard many times before. So, let’s look at the good, the bad, and the ugly of the “Let’s grow 10% next year” approach to strategic planning.

The good is that it’s an easy way to communicate that you want to grow, but not too much. It says, “Let’s get better at what we’re doing.” It’s also quick – most leaders who use 10% as a goal (I just can’t bring myself to call it a strategy!) need about 1 second to access their intuition and come up with that number. And it’s also good that most leaders who use 10% don’t enforce it – some years they’ll decline 1%, and others they’ll grow 20%, and both are received equally.

The bad is that 10% doesn’t tell anyone how to achieve 10% growth, and, since the person who used it likes a planning process that only takes 1 second, they usually won’t commit the time to strategy and planning to figure out how to get the 10%. And so, they just react to whatever the marketplace offers. That’s not good, but often times 10%ers are bailed out by a strong market, and so reacting is bad but OK.

Which brings us to the ugly, which arrives when a 10%er is managing a business in a market that is seeing substantial change. If that’s the situation, 10% is of no use, and in fact may be counter-productive. Because at the heart of 10% is “let’s change, but not more than we’re comfortable with.” And that can breed complacency that appears to be fine…until it’s too late for any small adjustments to work. And if the only goal you’ve ever had is 10% growth, you and your team are not going to be prepared when you need to lead your company outside your comfort zone.

So, if you’re a 10%er, you have a choice – to be passive or active. Either keep enjoying that comfortable feeling until you’re forced to do more…or lead your team to have a new set of discussions that develop your company’s ability to identify opportunities a little outside your comfort zone, go after them in smart ways, and stay ahead of the market.

I like SWOT assessments (you know – strengths, weaknesses, opportunities, and threats) for getting people’s thinking out of the day-to-day and into a creative, strategic “space.” Unfortunately, I often see SWOT assessments that are just marginally useful.

Here are some tips on how to get more value out of your SWOTs.

If you can take a bullet and put it on someone else’s SWOT without changing it, then you’re not specific enough. One of the favorites to put under Strengths is “Our People”…which is also a good example of a bullet that is not specific enough to be useful in the planning process. What is it about your people? Their experience? Their deep knowledge? Their ability to be generalists? Once I know what’s special about your people, then I can create some possibilities about how to leverage that into a better advantage.

Work hard to look at the future. We live our lives in the day-to-day, so it’s hard to look ahead several years. And that’s why it’s an advantage to do – because most people don’t.

Put “the hard stuff” on the list. Every business has issues that it doesn’t like to talk about. The problem customer. The problem owner. The problem staffer. Without knowing the details, I can tell you that those issues consume a large amount of resources. So they need to be on your SWOT – though it will probably take some diplomatic phrasing. (For example: “Some customers are easier to work with than others,” “Owners are not always aligned on decisions,” and “Spotty follow-through.”)

Make sure you have bullets that cover the whole breadth of the areas you’re involved in. Often, leadership teams focus more on certain areas, and that bias comes through on the SWOT. But the non-focus areas are often the places where there is the most opportunity, especially for companies that are developing from the lean-and-mean start-up to a more complete and sustainable enterprise.

So, here’s the question to ask about your SWOT to see if you’re getting the value out of it: “Does it give us insight into where we should commit significant resources over the next 3 years to improve our chances of success?” If it gives you that, then you’re getting the value you should. If it doesn’t, then you should take steps to upgrade it – which I’ll cover in my next post.

Your sales process sets up the success or failure of your production team.

I’ve often been in meetings with operational people who are overwhelmed and not hitting their targets. They struggle to get more efficient or productive, and desperately seek more resources that rarely come.

But when I see a target that is missed more than 5% of the time, I ask, “How did you set the target?”

It’s then that we find out that there is no good rationale for the target. It’s also often the case that the sales team is part of the problem.

Although it certainly makes it easier in the short run for salespeople to tell customers they can have whatever they want, it usually ends up costing the company money. Why? Because it puts excessive burden on the production team to meet targets that aren’t a good fit for the business.

Most customers can be managed. When they understand the costs and risks of different options, they will make a reasonable selection. But it requires a sales team that is able and willing to talk with customers in an educational, supportive, and firm way.

If your operations team is struggling, dig into your sales process, and understand how you’re setting customer expectations. It’s likely to have a huge impact on your operations team – and will likely improve your profitability too.

How good is your business’ radar system?

Do you have a radar system for your business?

For my clients who are using my 12-month strategic planning process – and for those of you who want to create a system for sustainable success – summer is the time we wrap up our survey of market trends and forces. So, as I look back on the process I’ve been through over the last 3 months with my clients, it’s interesting to think about the RADAR system we’ve built for their companies.

How can you build a radar system for your business?

You can build a system on the cheap by using what your company already has:

New project or product ideas customers have asked for over the last year

Recent customer requests

Internal brainstorming about new ideas

Clippings of trade journal articles that you can collect throughout the year

You can build a more robust system by adding some resources:

Using a consultant or service (or intern!) once a year to get more information about your markets – through web searches, customer interviews, and/or research reports

Building a searchable database of market intelligence facts

Naming one of your managers Trend Czar or Head Trendie, and

Once you have your company’s radar system built, then you have to read what it’s showing you. There are 5 steps to turning your “readings” into action:

1. Determine what resources you can devote to pursuing trends and new areas of business (as opposed to improving or expanding your current lines of business)

2. Assemble a long list (at least 12) of important trends from all the data you’ve collected

3. Filter your long list down to a short list (at most 5) by evaluating the general impact and potential of the trends

4. Determine which short-list trends will get resources by evaluating the details of the opportunity, the likelihood of your company’s success, the investment needed, and the risks.

5. Create an action plan for the trends that will get resources

Like any radar system, yours will give you advance notice of issues coming your way, so that you have time to prepare and react.

My 11-year-old son started playing hockey goalie this year. At a recent goalie clinic, his coach said something I think applies to business leaders…

“Goalie is a hard position. It’s hard to be in your stance through the whole game, it’s hard to shuffle across the crease while you follow the puck, it’s hard to move out to challenge the shooter. But those are the right things to do – those are what will help you make the save. You can play the easy way, but you won’t be successful. So, I want you to remember a simple phrase to help guide you while you’re in practice and in games…If it’s easy, it’s wrong. If it’s hard, it’s right.”

Let me review some of the easy things that I see business leaders do:

Make important decisions before understanding the consequences

Make important decisions without involving the people who will carry them out

Focus on feel-good marketing activity rather than figuring out their marketing ROI

React to sales opportunities rather than focus on the ones that are best for their business

Hire someone that they like

Keep someone they shouldn’t have hired

Avoid the hard decisions during strategy meetings, so that the decisions are left for people in the field to deal with when they’re faced with a problem

Assume they know what their customers or markets want without asking them

Don’t question their own biases and blindspots

In every one of those situations, it’s hard to do the right thing. It would be nice if they weren’t hard, or if there was a magic wand that would make them easy. But that’s not how those situations work. And what happens if you handle them the easy way? Things take longer, you create more problems, you spend more money. In short, the easy way is actually not the easy way.

So, here’s the key message I want you to remember as a business leader: When you’re in a complex or important situation, the hard way is actually the easiest way in the long run, if you’re aiming for long-term business success.

I know it’s not easy, but please do the right thing. It’s what your company, customers, markets and communities need from you.

“When should I add my next salesperson?” is a question consultants hear a lot.

This is an interesting question. It’s actually a subset of a broader question, “How do I know if I should make an investment?”

Unfortunately, investment decisions are usually uncertain, but there are a few things you can do to clarify the answer.

For hiring a salesperson, I’d ask…

–What is the current capacity of the team, and could you get more out of the team by “training them up” or restructuring how they’re supported?

–How hard will it be to find the right person for the job? (“Finding a salesperson is easy,” a client told me once. “Finding the right salesperson is what’s hard.”)

–Being really honest, how good are you at hiring in general, and at hiring/selecting salespeople in particular? How often do you find and select the right person?

–Since you probably won’t be able to hire the person right at the point your sales team is maxed out, would you rather live with the risk of paying someone who is not fully utilized, or having your staff stretched and possibly having some errors?

I often talk to my clients about hiring “ahead of the curve” (before the business is there) or “behind the curve” (after the business is there). The important thing to realize is that it’s unlikely that you’ll actually hire “on the curve.” So, you just have to decide what kind of risk you want to manage. You could make the investment before you know if you’ll have the business to support it – and be positioned for growth sooner. Or you could overtax the organization with more work than it can handle – and keep your expenses down.

The “right” option for you depends on your situation (e.g., “We’ve got tons of opportunity we just need feet on the street to get”), your business strategy (e.g., “We have to grow”), and the level and type of risk you are comfortable with (e.g., “I don’t like to make an investment until the odds look pretty darn good.”)

With salespeople, there sometimes is a way to have your cake and eat it too – by paying someone mostly on commission. The benefit of this approach is that you’re adding the bandwidth without the cost. The danger of this approach is along the lines of “You get what you pay for.” If you have proven that commission-driven salespeople can sell your product, and you can characterize the opportunity you have to offer, then you have a good chance of this working. If you’re still figuring out how to sell your product, or your other salespeople are not commission-based, then it would probably be a waste of time to look for someone using that compensation model – it’s just not good odds that you’ll find the right salesperson with that risky compensation.

If you don’t want to hire a salesperson now, there are alternatives that can get your more “throughput” from your sales team:

–“Training up” your current salespeople so they are more effective

–Improving processes or systems to make them more productive

–Having your admin staff (who are easier to hire than salespeople) handle more sales support activities for the sales team.

Lastly, there are a few things to keep in mind for hiring effectively. It’s generally a tough hiring market, so start looking early, because it’s likely to take you longer than you expect to find the right person. Also, plan to spend as much time on-boarding the new hire as you took to hire them. I’ve seen many salespeople flounder at the start because the company didn’t help them get into the business.

If you want to learn more about what kinds of salespeople there are, and what kind you might need, an excellent book and enjoyable read is Selling the Wheel.

As your company grows in Stage 2, you should use your sales process to drive more value – yes, for your company…but also for your customers. The only sustainable growth comes from win-win sales, so your sales process will benefit you and your customers.

One of the most important ways that your sales process can increase the value you bring to and get from your customers is by uncovering what the real need is. Oftentimes, customers don’t know what they don’t know, and by managing the sales process well, you can help them realize what they really need. In doing that, you also make sure that you’re paid for any premium value that you give them.

Price is a function of value, and the surprising fact that you need to know is that value is established when the need is defined, not when the solution is defined. If a customer comes to you and tells you what they need, then they have already set the price in their mind. On the other hand, if a customer comes to you and asks you to help define what they need, then you create the value together.

If you’re like most Second Stage companies, it’s hit or miss whether you’re talking to customers about the answer or the problem. It takes a clearly-defined market strategy, and a disciplined sales process, to ensure your conversations consistently focus on the need. That takes some work, but it’s also the best way to grow your small business in Stage 2.

As a small business emerges from the start-up phase, and becomes a Second Stage company, the sales process can and should be formalized.

It canbe formalized because you now have enough experience with sales to know some standard steps that you usually follow.

It should be formalized because you need to start building consistent expectations with your customers, you need more consistent information for your team, and you need to start to build up systems around your sales that will need some standardization.

I’m not suggesting you go overboard on this – just some general guidelines or steps that you’ve learned help you.

How do you create a (somewhat) standard sales process?

As a first step, think about the customers or orders that your team handles smoothly. What usually happens when those orders come in?

Then, think about the customers or orders that are a hassle. What usually happens with those orders – and what do you notice doesn’t happen with those.

When I asked these questions of a 20-person manufacturer last year, they realized that most of their sales followed 4 basic steps – but also that complex, unclear orders (which happened to be their highest-value work) needed a different process. They outlined the two different processes, and when I met with them 3 months later, they said, “We’re handling all of our orders much, much better. And the customers are a lot happier.”

If your small business has grown into a Second Stage company, your team and your customers will appreciate you starting to understand and standardize your sales process.